The Maryland Department of Health and Mental Hygiene failed to properly allocate funds to establishment grants for its health insurance marketplace.
The HHS Office of the Inspector General announced that an investigation had found the state agency had allocated $76.6 million to establishment grants based on methods that did not use updated or better data when available and did not have adequate controls to ensure the proper allocation of costs, according to a news release.
The OIG recommended that the state agency refund a total of $28.4 million to CMS and amend its Cost Allocation Plan and the Advance Planning document so allocated funds relate to the benefits. The agency also recommended that Maryland develop a written policy that expands how to calculate cost allocations and use updated and actual data as well as oversee operations to ensure the identification and correction of enrollment projection errors.
The state agency agreed with the OIG's recommendations to develop a written policy and oversee operations to ensure the accuracy of enrollment projection data, but did not concur with the office's other recommendations, according to the news release.
Maryland has experienced some speed bumps with the establishment of its health insurance marketplace. The state fired the contractor that built the exchange, Fargo, N.D.-based Noridian Healthcare Solutions, in February 2014, claming it had so many defects that the state might have to abandon all or parts of the system and start over. The site failed within minutes of its Oct. 1, 2013 launch date, according to the Washington Post.